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Wolseley’s Investment in E-Commerce Grows

CEO: E-commerce channel growing faster than traditional channels.
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UK-based Wolseley wants to improve the productivity of its business model, and it's eying e-commerce as a way to do so.

"We see the e-commerce channel as a way to better meet the needs of our customers," Group Chief Executive Ian Meakins said in a call to discuss Wolseley's fiscal first half results. "But also it's a lower cost-to-serve channel for us, leveraging the brand, the branch and logistics network without extra capacity being added."

In the first half of the fiscal year, sales through Wolseley's e-commerce channels topped £800 million (US$1.2 billion), 13 percent of total sales. "And it is still growing much faster than our traditional channels," Meakins said. For example, B2B sales through e-commerce in the U.S. grew 23 percent in the first half.

"Once customers are set up and have tried the channel, they quickly become adopters," Meakins says.

And online customers tend to be more loyal than those in traditional channels. Online customers gave Wolseley a Net Promoter Score of 73; core business customers gave an NPS of 68. (Learn more about assessing customer satisfaction in Measuring the Customer Experience.)

Of course growing e-commerce requires investment in the platform, which Meakins says the company will continue to do. It has already improved search functionality on its U.S. platform and personalized sites for different customer segments.

But this growth requires a balance. Wolseley will continue to build its branch network and grow its sales force, as well. "You do need sales people, you do need relationships with people," Meakins said. "…It's not always easy to just order the SKU you want."

And it's investing in other technologies and initiatives to support the effort, including customer segmentation and market size data analysis.

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